SCHEDULE 14A INFORMATION

______________________

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934

Filed by the Registrant

 

Filed by a Party other than the Registrant

 

Check the appropriate box:

 

Preliminary Proxy Statement

 

Confidential, for Use of the Commission only (as permitted by Rule 14a-6(e)(2))

 

Definitive Proxy Statement

 

Definitive Additional Materials

 

Soliciting Material Pursuant to §240.14a-12

Agrify Corporation
(Name of Registrant as Specified In Its Charter)

___________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if Other than the Registrant)

Payment of Filing Fee (check the appropriate box):

 

No fee required

 

Fee paid previously with preliminary materials.

 

Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a- 6(i)(1) and 0-11.

 

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AGRIFY CORPORATION

ANNUAL MEETING OF STOCKHOLDERS

______________________

January 8, 2024

______________________

NOTICE AND PROXY STATEMENT

 

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December 15, 2023

Dear Agrify Corporation Stockholder:

On behalf of the Board of Directors, I am pleased to invite you to attend the Agrify Corporation (“Agrify” or the “Company”) Virtual Annual Meeting of Stockholders to be Monday, January 8, 2024, at 10:00 a.m. Eastern Time. To be admitted to the Annual Meeting at www.virtualshareholdermeeting.com/AGFY2023, you must enter the control number found on your proxy card, voting instruction form or notice you previously received. You may vote during the Annual Meeting by following the instructions available on the meeting website during the meeting.

At the meeting, you and the other stockholders will be asked to vote upon the following:

        To elect six directors, each for a one-year term;

        To ratify the appointment of Marcum, LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2023;

        To approve an Amendment to the Company’s Articles of Incorporation to increase the number of authorized shares of Common Stock from 10,000,000 to 35,000,000, and to correspondingly increase the total authorized shares of stock from 13,000,000 to 38,000,000;

        To approve, as required by Nasdaq Listing Rule 5635(d), the increase in the number of shares of Common Stock underlying the warrant issued by the Company on October 27, 2023 upon the occurrence of certain equity issuances or conversions;

        To approve, as required by Nasdaq Listing Rule 5635, the amendment of the Senior Secured Convertible Note held by CP Acquisitions LLC, an affiliate of Raymond Chang and I-Tseng Jenny Chan (“CP Acquisitions”), to, among other things, consolidate a Senior Secured Note and a certain promissory note held by CP Acquisitions with the convertible note, decrease the conversion price thereunder to $1.46 per share of Common Stock and to increase the beneficial ownership limitation to 49.99%;

        To approve an amendment to the Agrify Corporation 2022 Omnibus Equity Incentive Plan to increase the number of shares of Common Stock available for issuance thereunder by 250,000 shares and to revise the minimum vesting provision; and

        To consider and vote upon an adjournment of the Annual Meeting in order to solicit additional proxies if there are not sufficient shares to be voted in favor of any of the foregoing proposals at the time of the Annual Meeting.

As of December 6, 2023, the Company had 1,701,243 shares of Common Stock outstanding. Only shareholders of record as of the close of business on December 6, 2023 are entitled to receive notice of, to attend, and to vote at, the Annual Meeting.

Whether or not you can attend the meeting, please read the attached proxy statement. When you have done so, please mark your vote on the proxy cardsign and date the proxy card, and return it to us. Alternatively, you may cast your vote by telephone, or through the Internet. Instructions for voting by telephone or through the Internet are included with your proxy. Your vote is important. Please act promptly by voting your shares by telephone, via the Internet, or by signing, dating and returning the proxy card.

 

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Thank you for your continued interest in Agrify. We look forward to seeing you at the meeting.

 

Sincerely,

   

   

Raymond Chang

   

Chairman and Chief Executive Officer

2468 Industrial Row Drive, Troy, MI 48084 • Tel: (855) 420-0020
ir@agrify.com • www.agrify.com

 

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Agrify Corporation
2468 Industrial Row Drive
Troy, Michigan 48084

______________________

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held January 8, 2024

______________________

To the Stockholders:

Agrify Corporation (“Agrify”) will hold its Virtual Annual Meeting of Stockholders on January 8, 2024 at 10:00 a.m., Eastern Time. To be admitted to the Annual Meeting at www.virtualshareholdermeeting.com/AGFY2023, you must enter the control number found on your proxy card, voting instruction form or notice you previously received. You may vote during the Annual Meeting by following the instructions available on the meeting website during the meeting.

We are holding this meeting for the following purposes:

        To elect six directors, each for a one-year term;

        To ratify the appointment of Marcum, LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2023;

        To approve an Amendment to the Company’s Articles of Incorporation to increase the number of authorized shares of Common Stock from 10,000,000 to 35,000,000, and to correspondingly increase the total authorized shares of stock from 13,000,000 to 38,000,000;

        To approve, as required by Nasdaq Listing Rule 5635(d), the increase in the number of shares of Common Stock underlying the warrant issued by the Company on October 27, 2023 upon the occurrence of certain equity issuances or conversions;

        To approve, as required by Nasdaq Listing Rule 5635, the amendment of the Senior Secured Convertible Note held by CP Acquisitions LLC, an affiliate of Raymond Chang and I-Tseng Jenny Chan (“CP Acquisitions”), to, among other things, consolidate a Senior Secured Note and a certain promissory note held by CP Acquisitions with the convertible note, decrease the conversion price thereunder to $1.46 per share of Common Stock and to increase the beneficial ownership limitation to 49.99%;

        To approve an amendment to the Agrify Corporation 2022 Omnibus Equity Incentive Plan to increase the number of shares of Common Stock available for issuance thereunder by 250,000 and to revise the minimum vesting provision; and

        To consider and vote upon an adjournment of the Annual Meeting in order to solicit additional proxies if there are not sufficient shares to be voted in favor of any of the foregoing proposals at the time of the Annual Meeting.

The Board of Directors selected December 6, 2023 as the record date for determining stockholders entitled to vote at the Annual Meeting. As of December 6, 2023, Agrify had 1,701,243 shares of Common Stock outstanding. A list of stockholders on that date will be available for inspection at Agrify’s corporate headquarters, 2468 Industrial Row Drive, Troy, Michigan 48084, during normal business hours for the ten-day period prior to the Annual Meeting. Only holders of our Common Stock as of the close of business on December 6, 2023 are entitled to vote at the Annual Meeting or any adjournment thereof.

 

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On or about December 15, 2023, we are mailing to our stockholders our proxy statement, proxy and 2022 Annual Report on Form 10-K.

 

By Order of the Board of Directors,

   

   

Raymond Chang

   

Corporate Secretary

Troy, Michigan
December 15, 2023

Important Notice Regarding Availability of Proxy Materials for the Virtual Annual Meeting of Stockholders Meeting to be Held on January 8, 2024: The Notice of Annual Meeting and Proxy Statement and our 2022 Annual Report on Form 10-K are available at www.proxyvote.com.

2468 Industrial Row Drive • Troy, Michigan 48084 • Tel: (855) 420-0020
ir@agrify.com • www.agrify.com

 

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IMPORTANT

Whether or not you expect to attend the virtual annual meeting, we urge you to vote your shares at your earliest convenience. This will ensure the presence of a quorum at the meeting. Promptly voting your shares by telephone, via the Internet, or by signing, dating, and returning the enclosed proxy card will save the Company the expense and extra work of additional solicitation. An addressed envelope, for which no postage is required if mailed in the United States, is enclosed if you wish to vote by mail. Submitting your proxy now will not prevent you from voting your shares at the meeting if you desire to do so, as your proxy is revocable at your option.

 

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GENERAL INFORMATION

Annual Meeting Information

This proxy statement contains information related to the Virtual Annual Meeting of Stockholders of Agrify Corporation (the “Company” or “Agrify”) to be held on January 8, 2024, beginning at 10:00 a.m., Eastern Time, and any postponements or adjournments thereof (the “Annual Meeting”). This proxy statement was prepared at the direction of our Board of Directors to solicit your proxy for use at the Annual Meeting. On or about December 15, 2023, we are mailing to our stockholders our proxy statement, Annual Report and proxy materials.

To be admitted to the Annual Meeting at www.virtualshareholdermeeting.com/AGFY2023 you must enter the control number found on your proxy card, voting instruction form or notice you previously received. You may vote during the Annual Meeting by following the instructions available on the meeting website during the meeting.

Q:     Who is soliciting my proxy?

A:     We, the Board of Directors of Agrify Corporation, are sending you this proxy statement in connection with our solicitation of proxies for use at the Annual Meeting. Certain directors, officers and employees of Agrify may (without compensation), and Alliance Advisors (our proxy solicitor) will, solicit proxies on our behalf by mail, phone, fax, Internet or at the Annual Meeting.

Q:     Who is paying for this solicitation?

A:     Agrify will pay for the solicitation of proxies, including Alliance Advisors’ estimated fee of approximately $15,000, plus out-of-pocket expenses. Agrify also will reimburse banks, brokers, custodians, nominees and fiduciaries for their reasonable charges and expenses to forward our proxy materials to the beneficial owners of Agrify Common Stock.

Q:     What am I voting on?

A:     There are seven items scheduled to be voted on at the Annual Meeting:

        Item 1 — The election of Raymond Chang, Max Holtzman, I-Tseng Jenny Chan, Timothy Mahoney, Leonard J. Sokolow, and Krishnan Varier and Stuart Wilcox to the Board of Directors;

        Item 2 — The ratification of the appointment of Marcum, LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2023 (the “Auditor Appointment”);

        Item 3 — The approval of an Amendment to our Articles of Incorporation to increase the number of authorized shares of Common Stock from 10,000,000 to 35,000,000, and to correspondingly increase the total authorized shares of stock from 13,000,000 to 38,000,000 (the “Authorized Share Increase”);

        Item 4 — The approval, as required by Nasdaq Listing Rule 5635(d), the increase in the number of shares of Common Stock underlying the warrant issued by us on October 27, 2023 upon the occurrence of certain equity issuances or conversions (the “Warrant Adjustment Proposal”);

        Item 5 — The approval, as required by Nasdaq Listing Rule 5635, the amendment of the Senior Secured Convertible Note held by CP Acquisitions LLC, an affiliate of Raymond Chang and I-Tseng Jenny Chan (“CP Acquisitions”), to, among other things, consolidate a Senior Secured Note and a certain promissory note held by CP Acquisitions with the convertible note, decrease the conversion price thereunder to $1.46 per share of Common Stock and to increase the beneficial ownership limitation to 49.99% (the “Note Amendment Proposal”);

        Item 6 — The approval of an amendment to the Agrify Corporation 2022 Omnibus Equity Incentive Plan to increase the number of shares of Common Stock available for issuance thereunder by 250,000 and to revise the minimum vesting provision (the “Equity Plan Proposal”); and

        Item 7 — The approval of an adjournment of the Annual Meeting in order to solicit additional proxies if there are not sufficient shares to be voted in favor of any of the foregoing proposals at the time of the Annual Meeting (the “Adjournment Proposal”).

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Q:     Who can vote?

A:     Only those who owned Common Stock of record at the close of business on December 6, 2023, the record date for the Annual Meeting (the “Record Date”), can vote. If you owned Common Stock on the Record Date, you have one vote per share for each Item up for vote at the Annual Meeting.

Q:     How do I vote?

A:     You may vote your shares either at the Annual Meeting or by proxy. To vote by proxy, you should mark, date, sign and mail the proxy card provided with this proxy statement or vote by telephone or through the Internet.

You will be able to participate in the Annual Meeting online and submit your questions during the meeting by visiting www.virtualshareholdermeeting.com/AGFY2023. To be admitted to the Annual Meeting, you must enter the control number found on your proxy card, voting instruction form or notice you received. You also will be able to vote your shares electronically prior to or during the Annual Meeting. If you want to submit a question during the Annual Meeting, log into www.virtualshareholdermeeting.com/AGFY2023, type your question into the “Ask a Question” field, and click “Submit.” Questions pertinent to meeting matters will be read and answered during the meeting, subject to time constraints.

If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support number that will be posted on the Virtual Shareholder Meeting log in page.

Q:     Can I vote by telephone or electronically?

A:     If you are a registered stockholder, you may vote by telephone, or electronically through the Internet, by following the instructions included with your proxy card. If your shares are held in “street name,” please check your proxy card or contact your broker or nominee to determine whether you will be able to vote by telephone or electronically. The deadline for voting by telephone or electronically is 11:59 p.m., Eastern Daylight Time, on January 7, 2023.

Q:     How are votes counted?

A:     You may vote for each of the seven proposals as follows:

        “FOR” or “WITHHOLD” with respect to each nominee to our Board of Directors specified in Item 1 of this proxy statement;

        “FOR,” “AGAINST” or “ABSTAIN” with respect to the ratification and approval of the Auditor Appointment described in Item 2 of this proxy statement;

        “FOR,” “AGAINST” or “ABSTAIN” with respect to the Authorized Share Increase described in Item 3 of this proxy statement;

        “FOR,” “AGAINST” or “ABSTAIN” with respect to the Warrant Adjustment Proposal described in Item 4 of this proxy statement;

        “FOR,” “AGAINST” or “ABSTAIN” with respect to the Note Amendment Proposal described in Item 5 of this proxy statement;

        “FOR,” “AGAINST” or “ABSTAIN” with respect to the Equity Plan Proposal described in Item 6 of this proxy statement;

        “FOR,” “AGAINST” or “ABSTAIN” with respect to the Adjournment Proposal described in Item 7 of this proxy statement.

If you return your proxy but do not mark your voting preference, the individuals named as proxies will vote your shares “FOR” the election of each of the nominees for director and “FOR” each of Items 2 through 7. Giving a proxy will not affect your right to vote your shares at the Annual Meeting. If you attend the Annual Meeting, you may revoke your proxy and vote at the Annual Meeting if you wish.

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Q:     What happens if I withhold my vote for an individual director?

A:     Withheld votes are not included in the vote tally for the election of directors. If you wish your shares to be voted for some nominees, and not voted for others, then indicate the name(s) of the nominee(s) for whom you are withholding authority to vote by writing the name(s) of such nominee(s) in the space provided in the proxy. If you wish to withhold authority to vote for all nominees, check the box marked “WITHHOLD ALL.

Q:     What are broker non-votes and abstentions?

A:     If you are the beneficial owner of shares held in “street name” by a broker, then the broker, as the record holder of the shares, is required to vote those shares in accordance with your instructions. If you do not give instructions to the broker, then the broker will be entitled to vote the shares with respect to “discretionary” items but will not be permitted to vote the shares with respect to “non-discretionary” items (in which case, the shares will be treated a “broker non-vote”). An abstention is a decision by a stockholder to take a neutral position on a proposal being submitted to stockholders at a meeting.

Q:     On which proposals do brokers have discretion to vote without instructions from beneficial owners?

A:     If you are the beneficial owner of shares held in “street name” by a broker, then the broker, as the record holder of the shares, is required to vote those shares in accordance with your instructions. However, if you do not give instructions to the broker, then the broker will not be entitled to vote the shares with respect to Item 1, the election of directors, or Item 4, the Warrant Adjustment Proposal, Item 5, the Note Amendment Proposal, Item 6, the Equity Plan Proposal, and Item 7, the Adjournment Proposal. Brokers will be able to vote on the approval of the Item 2, the Audit Appointment, and Item 3, the Authorized Share Increase, in the absence of your instructions as those matters are considered “discretionary” items.

Q:     How do broker non-votes and abstentions affect the existence of a quorum and the vote required for the proposals at the Annual Meeting?

A:     Broker non-votes and abstentions on any matter are included in determining the number of shares represented for the purpose of determining whether a quorum is present at a stockholders’ meeting. Because directors will be elected by a plurality of the votes cast (i.e., the six director nominees receiving the greatest number of votes will be elected) at the Annual Meeting, an abstention would have no effect on the vote concerning the election of directors and thus is not being offered as a voting option in the election of directors under Item 1. Under Nevada law, broker non-votes are not considered to be entitled to vote on the matter and, thus, will not have any impact on the outcome of Items 4, 5, 6 and 7. Although abstentions are considered present and entitled to vote on a matter, abstentions are not considered to be votes cast under Nevada law, and thus will have no impact on the outcome of Items 4, 5, 6 and 7, each of which requires the favorable vote of a majority of the votes cast at the Annual Meeting by stockholders entitled to vote on the matter. Item 3 requires the favorable vote of a majority of our outstanding shares of Common Stock, so any shares not voted (whether by abstention or otherwise) will have the same effect as a vote “against” Item 3. Accordingly, it is important that beneficial owners instruct their brokers how they wish to vote their shares on Item 3.

Q:     Can I change my vote after I return my proxy card?

A:     Yes. Even after you have submitted your proxy, you may change your vote at any time before the proxy is exercised by filing with the Corporate Secretary either written notice of your revocation or a duly executed proxy bearing a later date. Attendance at the Annual Meeting will not by itself revoke a previously granted proxy; however, delivery of a later dated proxy before the polls close at the Annual Meeting will revoke a proxy previously granted.

Q:     What are the Board’s recommendations?

A:     Our Board of Directors recommends that you vote your shares as follows:

        “FOR” each of the six nominees to our Board of Directors as described in Item 1 of this proxy statement;

        “FOR” the ratification and approval of the Auditor Appointment as described in Item 2 of this proxy statement;

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        “FOR” the approval of the Authorized Share Increase described in Item 3 of this proxy statement;

        “FOR” the approval of the Warrant Adjustment Proposal described in Item 4 of this proxy statement;

        “FOR” the approval of the Note Amendment Proposal described in Item 5 of this proxy statement;

        “FOR” the Equity Plan Proposal described in Item 6 of this proxy statement;

        “FOR” the approval of the Adjournment Proposal described in Item 7 of this proxy statement.

Q:     What constitutes a quorum?

A:     As of December 6, 2023, we had 1,701,243 shares of Common Stock, $0.001 par value, outstanding and 58 holders of record. Each share of our Common Stock is entitled to one vote per share. The holders of a majority of the total outstanding shares entitled to vote, present at the Annual Meeting or represented by proxy, will constitute a quorum for the transaction of business at the Annual Meeting.

Q:     What happens if a quorum is not present?

A:     If a quorum is not present at the scheduled time of the Annual Meeting, then the stockholders who are represented may adjourn the Annual Meeting until a quorum is present. The time and place of an adjourned meeting, if necessary, would be announced at the time the adjournment is taken and no other notice would be given. Voting cannot take place unless a quorum is present.

Q:     What is the voting requirement to approve each of the items?

A:     The voting requirement to approve each of the proposals is as follows:

        Directors are elected by a plurality of the votes cast. This means that the six nominees will be elected if they receive more affirmative votes than any other nominees.

        The affirmative vote of a majority of votes cast on the proposal is required to ratify the Auditor Appointment in Item 2.

        The affirmative vote of a majority of our outstanding shares of Common Stock is required to approve the Authorized Share Increase in Item 3.

        The affirmative vote of a majority of votes cast on the proposal is required to approve the Warrant Adjustment Proposal in Item 4.

        The affirmative vote of a majority of our outstanding shares of Common Stock is required to approve the Note Amendment Proposal in Item 5.

        The affirmative vote of a majority of votes cast on the proposal is required to approve the Equity Plan Proposal in Item 6.

        The affirmative vote of a majority of our outstanding shares of Common Stock is required to approve the Adjournment Proposal in Item 7.

Q:     Can I vote on other matters?

A:     Our Amended and Restated Bylaws limit the matters presented at an Annual Meeting to those in a notice of Annual Meeting and those otherwise properly presented at an Annual Meeting. Since none of our stockholders provided notice for any other business matters during the applicable period set forth in our Amended and Restated Bylaws, no matters other than those included in the Notice of Annual Meeting may properly come before the Annual Meeting.

Q:     Who will count the vote?

A:     Representatives of Broadridge Financial Solutions, Inc., our transfer agent, will tabulate the votes.

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ITEM 1 — ELECTION OF DIRECTORS

Our Board of Directors (which is sometimes referred to in this proxy statement as our “Board”) currently consists of Raymond Chang, Max Holtzman, Guichao Hua, Timothy Mahoney, Leonard J. Sokolow, and Krishnan Varier. Stuart Wilcox served on the Board until July 14, 2022, when he resigned in connection with his appointment as Chief Operating Officer, and Thomas Massie served on the Board until July 8, 2022, when he resigned from the Board and from his position as President and Chief Operating Officer. Max Holtzman was appointed to the Board on July 14, 2022. Mr. Hua will not stand for re-election at the Annual Meeting. You and the other stockholders are requested to vote for the nominees set forth below to serve as directors until the 2024 Annual Meeting of Stockholders or until their successors are duly elected and qualified. The individuals named as proxies will vote the enclosed proxy for the election of all nominees listed below, unless you direct them to withhold your votes. If any nominee becomes unable to serve as a director before the Annual Meeting (or decides not to serve), the individuals named as proxies may vote for a substitute or we may reduce the number of members of the Board.

Vote Required

If a quorum is present, individual nominees will be elected by a plurality of the votes of shares present at the Annual Meeting or represented by proxy at the Annual Meeting. This means that the six nominees will be elected if they receive more affirmative votes than any other nominees. If you are the beneficial owner of shares held in “street name” by a broker, then the broker, as the record holder of the shares, is required to vote those shares in accordance with your instructions. However, if you do not give instructions to the broker, then the broker will not be entitled to vote the shares with respect to the election of directors.

Recommendation of the Board

Our Board of Directors recommends that you vote “FOR” each of the following nominees.

Following are the names and ages of the director nominees, the year they became directors, their principal occupations or employment for at least the past five years and certain of their other directorships.

Nominees for Election

Name

 

Age

 

Experience

Raymond Chang

 

53

 

Mr. Chang has served as Chief Executive Officer and Chairman of the Board of Directors since June 2019 and served as the Company’s President from June 2019 to November 2021. From September 2015 through May 2019, Mr. Chang was a lecturer in the Practice of Management at the Yale School of Management and an Adjunct Professor at Babson College as well as a managing director at NXT Ventures. In 1997, Mr. Chang founded GigaMedia, the first broadband company in Asia. In 2000, this company went public on Nasdaq (Nasdaq: GIGM) and raised $280 million, one of the largest IPOs for an internet company prior to 2000. In 2007, Mr. Chang founded Luckypai, a leading TV shopping company in China and raised venture financing from Lightspeed Venture Partners, DT Capital, Intel, Lehman Brothers, and Goldman Sachs. Luckypai was sold to Lotte Group, which is one of the largest Asian conglomerates based in Korea, for $160 million in 2010. From 2012 to 2013, Mr. Chang served as the chief executive officer of New Focus Auto, the largest automobile aftersales service company listed on the Hong Kong Stock Exchange (HKSE: 0360.HK). In 2014, Mr. Chang completed the sale of New Focus Auto to CDH Investments, which is one of the largest private equity firms based in Asia and raised over $150 million for the company. In 2000, Mr. Chang was selected by Fortune as one of the twenty-five “Next Generation Global Leaders Under 40” and by Business Week Asia as one of Asia’s 20 most influential new economy leaders in the 21 century. He was also featured in 2005 as a panel speaker at the World Economic Forum in Zurich, Switzerland. Mr. Chang was the former treasurer/elected board member of Shanghai American School and a member of the Young Presidents Organization – Shanghai Chapter. Mr. Chang received his BA from New York University, MBA from Yale School of Management, and MPA from Harvard JFK School of Government. Mr. Chang has served as a Director of our Company since June 2019.

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Name

 

Age

 

Experience

Max Holtzman

 

54

 

Mr. Holtzman has served as a member of our Board of Directors since July 14, 2022. Mr. Holtzman has served as Operations Director at Ocean 14 Capital, a private equity impact fund focused on the Blue Economy, since December 2021. Mr. Holtzman has also served as Investments Principal at Pontos Aqua, LLC, which provides strategic advisory services in the global seafood and aquaculture space, since June 2017. Mr. Holtzman is a founding officer of Stronger America through Seafood, which strives to increase the production of healthy, sustainable, and affordable seafood in the United States. Mr. Holtzman previously served as the Vice Chairman of Capitol Peak Asset Management, which focused on infrastructure projects and companies in Rural America. Prior to Capitol Peak, Mr. Holtzman was appointed by President Obama as the Senior Advisor to the United States Secretary of Agriculture. From 2009 to 2014, Mr. Holtzman advised the Secretary on the development of new public-private partnerships, aquaculture, trade, biotechnology, and international food security. He also served as Acting Deputy Under Secretary for Farm and Foreign Agriculture Services and as Acting Deputy Under Secretary of Marketing and Regulatory Programs. In these roles, Mr. Holtzman represented the United States in its negotiations with the Peoples Republic of China as a four-time Delegate on the Joint Committee on Commerce and Trade, and he was regularly involved with a multitude of international trade issues, trade missions, and trade negotiations. He also served as the United States Chairman of the North American Biotechnology Initiative, which includes the United States, Canada, and Mexico. Prior to this appointment, Mr. Holtzman, an attorney for over 25 years, provided strategic consulting to multi-national companies related to transportation infrastructure, project finance, public-private partnerships, health care, and government procurement. He also served as a City Attorney and Special Counsel to several municipalities. Mr. Holtzman has served as a Board Member of The Arcadia Center for Sustainable Food and Agriculture since September 2016, the Founding Chairman of Adopt-A-Classroom, and he has sat on the Global Advisory Council of Secure System since January 2018. Mr. Holtzman received his undergraduate degree in Agricultural Economics from the University of Florida’s Institute of Food and Agricultural Sciences and his law degree from the University of Miami.

I-Tseng Jenny Chan

 

50

 

Ms. Chan is a nominee for election to our Board of Directors. Ms. Chan is a luxury brand professional with more than twenty years’ expertise in selling and curating rare gems and antiques. From 2012 to 2018, Ms. Chan served as founder of Studio Rouge in Taipei, Taiwan, where she was responsible for jewelry procurement and merchandise development. Prior to that, Ms. Chan served in various roles at De Beers, Dior Joallerie, JP Collections, Nortel Networks and Thomasville Jewelry Company. Ms. Chan received a Bachelor of Engineering from McGill University and a Master of Science at the University of Illinois.

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Name

 

Age

 

Experience

Leonard J. Sokolow

 

67

 

Mr. Sokolow has served as a member of Agrify’s Board of Directors since December 2021. Since September 2023, Mr. Sokolow has served as co-Chief Executive Officer of SKYX Platforms Corp. (Nasdaq: SKYX). He had served as in independent director and board committee member of SKYX Platforms since 2015 and continues to serve as a board member of that company. From 2015 to August 2023, Mr. Sokolow served as Chief Executive Officer and President of Newbridge Financial, Inc., a financial services holding company. From 2015 to July 2022 Mr. Sokolow served as Chairman of Newbridge Securities Corporation, Newbridge Financial, Inc.’s full service broker-dealer. From August 2022 to August 2023 Mr. Sokolow served as CEO of Newbridge Securities Corporation and Newbridge Financial Services Group, Inc., Newbridge Financial, Inc.’s, full service registered investment adviser. From 2008 through 2012, he served as President and Vice Chairman of National Holdings Corporation, a publicly traded financial services company. From November 1999 until January 2008, Mr. Sokolow was Chief Executive Officer and President, and a member of the Board of Directors, of vFinance Inc., a publicly traded financial services company, which he cofounded. Mr. Sokolow was the Chairman of the Board of Directors and Chief Executive Officer of vFinance Inc. from January 2007 until July 2008, when it merged into National Holdings Corporation. From 1994 to 1998, Mr. Sokolow was founder, Chairman and Chief Executive Officer of the Americas Growth Fund Inc., a closed-end registered investment company. From 1988 until 1993, Mr. Sokolow was an Executive Vice President and the General Counsel of Applica Inc., a publicly traded appliance marketing and distribution company. From 1982 until 1988, Mr. Sokolow practiced corporate, securities and tax law and was one of the founding attorneys and a partner of an international boutique law firm. From 1980 until 1982, he worked as a Certified Public Accountant for Ernst & Young and KPMG Peat Marwick. Since June 2006, Mr. Sokolow has served on the Board of Directors of Consolidated Water Company Ltd. (Nasdaq: CWCO) and as Chairman of its Audit Committee; as well as a member of its Nominations and Corporate Governance Committee since 2011. Since December 2021, Mr. Sokolow has served as a member of the Board of Directors of Agrify Corporation (Nasdaq: AGFY), where he currently serves as a member of the Audit Committee and the Compensation Committee. Mr. Sokolow received his B.A. and J.D. degrees from the University of Florida and a Masters of Law in Taxation from New York University Law School and remains a Certified Public Accountant.

Timothy Mahoney

 

67

 

Mr. Mahoney is the owner of Caribou LLC, a strategic advisory firm he founded in 2009 that consults with CEOs and their boards on managing systemic risk and maximizing shareholder value through the identification and capture of strategic opportunities. In March 2013, Mr. Mahoney also founded Cannae Policy Group, a Washington D.C. based public policy company, where he serves as a Chief Political Strategist advising companies, associations, and governments on complex public policy issues. Mr. Mahoney served as a U.S. Representative for Florida’s 16 congressional district from January 2007 to January 2009. From 1998 to 2007, Mr. Mahoney was a Co-Founder of vFinance, Inc., which subsequently acquired National Holdings Corporation. National Holdings Corporation has grown to become one of America’s leading middle-market investment brokerage firms, managing more than $5 billion of client assets with over 50 offices worldwide. Mr. Mahoney has also been involved with companies in the cannabis industry in varying capacities as a private investor, advisor and consultant, including Atlas Biotechnologies, Inc., a licensed medical cannabis grower operating in Canada and the EU, and Volcanic Green Holdings, Inc., a holding company for a Colombian based outdoor cultivation cannabis grower and CBD extracts producer. Mr. Mahoney holds a BA degree in Computer Science and Business from West Virginia University and an MBA from George Washington University. Mr. Mahoney has served as a member of Agrify’s Board of Directors since December 2020.

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Name

 

Age

 

Experience

Krishnan Varier

 

44

 

Mr. Varier joined Agrify’s Board of Directors in June 2020, after briefly serving as a board observer. He is a Managing Partner and the Chief Investment Officer of Arcadian Capital Management, a Los Angeles, California based venture capital private equity firm particularly focused on investing in ancillary businesses related to the cannabis and hemp industries. He has served in this role since joining Arcadian in 2018 to help lead its principal investing activities, bringing more than 15 years of financial services and Wall Street deal-making experience. From 2016 through 2018, Mr. Varier formed Varier Venture Consulting LLC to assist in the growth of early-stage startup companies, primarily by providing strategic advice regarding capital raising strategies. From 2014 through 2016, Mr. Varier was an investment banker with Cowen & Company, where he covered corporate clients in the healthcare biotechnology industry. From 2013 through 2014, he was a Senior Investment Analyst with Health Care REIT, which has since been re-branded as Welltower REIT, and is a leading provider of real estate capital to seniors housing operators, post-acute healthcare providers and health systems. From 2011 through 2013, Mr. Varier was an investment banker in BofA-Merrill Lynch’s Global Corporate & Investment Banking group covering healthcare corporate clients. He began his investment banking career in 2010 with Morgan Keegan, which is now part of Raymond James Financial Services, Inc. Mr. Varier has been involved in more than $6 billion in closed capital raising and merger and acquisition transactions as an investment banking professional. Mr. Varier earned a B.A. in Economics with a focus in Business Administration in 2001 from the University of Texas at Austin. In 2010, Mr. Varier received an MBA degree in Finance and Investment Management from the University of North Carolina at Chapel Hill, Kenan-Flagler Business School. Mr. Varier has served as a member of our Board of Directors since June 2020.

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CORPORATE GOVERNANCE

Board and Board Committee Matters

The Board currently consists of six directors. The Board has determined that Max Holtzman, Timothy Mahoney, Leonard J. Sokolow, and Krishnan Varier are all “Independent” directors under the Nasdaq listing standards.

As required by the Nasdaq listing standards, the Board must be composed of a majority of independent directors. The committee charters are reviewed annually and updated as necessary to reflect changes in regulatory requirements and evolving oversight practices.

The Board currently has four standing committees consisting of: the Nominating and Corporate Governance Committee, the Compensation Committee, and the Audit Committee and the Mergers and Acquisitions Committee. No member of the Audit, Compensation or Nominating and Corporate Governance Committee is an employee of the Company or its subsidiaries, and all are currently independent as defined by the Nasdaq listing standards. In March 2022, the Company became aware of a consulting arrangement between an entity partially owned by Mr. Mahoney and the Company that resulted in Mr. Mahoney not being considered independent for purposes of Audit Committee membership. Mr. Mahoney did not provide any consulting services on behalf of the consulting group and did not receive any fees from the consulting group in connection with the agreement between the consulting group and the Company. The Company promptly terminated the consulting relationship, upon which Mr. Mahoney regained his independent status for Audit Committee purposes. Each of the Audit, Compensation and Nominating and Corporate Governance Committees has a written charter approved by the Board of Directors. The committee charters as well as the Company’s Code of Conduct and Ethics, which applies to all directors, officers and employees, are available under “Corporate Governance” in the Investor Relations section of our Company’s website at https://ir.agrify.com. Please note that the information contained on the Company website is not incorporated by reference in, or considered to be a part of, this proxy statement.

The current members of the Committees are identified below:

Director

 

Nominating
and Corporate
Governance

 

Compensation

 

Audit

 

Mergers and
Acquisitions

Max Holtzman

 

X (Chair)

 

X

     

X

Timothy Mahoney

 

X

 

X (Chair)

 

X

 

X

Leonard J. Sokolow

     

X

 

X

   

Krishnan Varier

 

X

     

X (Chair)

 

X (Chair)

Nominating and Corporate Governance Committee.    The current members of the Nominating and Corporate Governance Committee are directors Holtzman, who chairs the committee, Mahoney and Varier. Each of these directors is independent as defined under applicable Nasdaq listing requirements. This Committee’s responsibilities include the selection of potential candidates for the Board. Mr. Wilcox served as chair of the committee until his resignation from the Board on July 14, 2022.

Compensation Committee.    The current members of the Compensation Committee are directors Mahoney, who chairs the committee, Sokolow and Holtzman. Each of these directors is independent as defined under applicable Nasdaq listing requirements. The Compensation Committee is responsible for discharging the responsibilities of the Board with respect to the compensation of our executive officers. The Compensation Committee sets performance goals and objectives for the Chief Executive Officer and the other executive officers, evaluates their performance with respect to those goals and sets their compensation based upon the evaluation of their performance. In evaluating executive officer pay, the Compensation Committee has retained the services of a compensation consultant and considers recommendations from the Chief Executive Officer with respect to goals and compensation of the other executive officers. The Compensation Committee assesses the information it receives in accordance with its business judgment. The Compensation Committee also periodically reviews director compensation. All decisions with respect to executive and director compensation are approved by the Compensation Committee and, in the case of director compensation, ratified by the Board. Mr. Wilcox served as a member of the committee until his resignation from the Board on July 14, 2022.

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Audit Committee.    The current members of the Audit Committee are directors Varier, who chairs the committee, Mahoney and Sokolow. The Board of Directors has determined that all members of the Audit Committee satisfy the financial literacy requirements of the Nasdaq listing standards and are independent as defined under the Nasdaq listing requirements and applicable Securities and Exchange Commission (“SEC”) rules. In addition, our Board of Directors has determined that each of Messrs. Varier and Sokolow qualifies as an “Audit Committee Financial Expert” as defined under SEC rules. The Audit Committee is primarily concerned with the accuracy and effectiveness of the audits of our Company’s financial statements by our independent registered public accountants. Its duties include, among other things:

        appointing, compensating, retaining, evaluating, terminating, and overseeing our independent registered public accounting firm;

        discussing with our independent registered public accounting firm the independence of its members from our management;

        reviewing with our independent registered public accounting firm the scope and results of their audit;

        approving all audit and permissible non-audit services to be performed by our independent registered public accounting firm;

        overseeing the financial reporting process and discussing with management and our independent registered public accounting firm the interim and annual financial statements that we file with the SEC;

        reviewing and monitoring our accounting principles, accounting policies, financial and accounting controls, and compliance with legal and regulatory requirements;

        coordinating the oversight by our board of directors of our code of business conduct and our disclosure controls and procedures;

        establishing procedures for the confidential and/or anonymous submission of concerns regarding accounting, internal controls or auditing matters; and

        reviewing and approving related party transactions.

The Audit Committee’s procedures for the pre-approval of audit and permitted non-audit services are described in “Item 5: Ratification of the Auditor Appointment.” For more information on the Audit Committee, refer to the “Report of the Audit Committee” included elsewhere herein.

Mergers and Acquisitions Committee.    The current members of the Mergers and Acquisitions Committee are directors Varier, who chairs the committee, Mahoney and Holtzman. The purpose of the Mergers & Acquisitions Committee is to assist the Board and the Audit Committee in evaluating any related party transactions that the Company may consider from time to time. Mr. Wilcox served as a member of the committee until his resignation from the Board on July 14, 2022.

Number of Meetings of the Board of Directors and Attendance in 2022

During fiscal 2022, our Board and various Board Committees held the following number of meetings and took the following action by written consent: Board of Directors, 9 meetings and 12 actions by written consent; Audit Committee, 7 meetings and 1 action by written consent; Compensation Committee, 4 meetings and 4 actions by written consent; and Nominating and Corporate Governance Committee, 1 meeting and 2 actions by written consent. No director attended fewer than 75% of the aggregate Board meetings and Board Committee meetings on which that director served.

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Compensation Committee Interlocks and Insider Participation

During 2022, Messrs. Mahoney, Wilcox, Sokolow and Holtzman each served as members of the Compensation Committee. Mr. Wilcox served as a member of the committee until his resignation from the Board on July 14, 2022 in connection with his appointment as Chief Operating Officer. Upon his appointment, Mr. Wilcox was removed as a member of the Compensation Committee. During 2022, no member of the Compensation Committee, aside from Mr. Wilcox being named as an executive officer of the Company concurrently with his removal from the Compensation Committee, is or has ever been one of our officers or an employee of the Company. None of our executive officers serves as a member of the board of directors or compensation committee of any entity that has one or more of its executive officers serving as a member of our Board of Directors or Compensation Committee.

Director Nomination Process

Our Board of Directors has adopted a Nominating and Corporate Governance Committee Charter, which includes director nomination policies and provisions that are intended to describe the process by which candidates for possible inclusion in the Company’s recommended slate of director nominees are selected. The nomination policies are administered by the Nominating and Corporate Governance Committee of the Board of Directors.

The Board of Directors does not currently prescribe any minimum qualifications for director candidates. Consistent with the criteria for the selection of directors approved by the Board of Directors, the Nominating and Corporate Governance Committee will take into account our current needs and the expertise needed for board service, including experience and achievement in business, finance, technology or other areas relevant to our activities; reputation, ethical character and maturity of judgment; diversity of viewpoints, backgrounds and experiences; absence of conflicts of interest including competitive conflict that might impede the proper performance of the responsibilities of a director; independence under SEC and Nasdaq listing standards; service on other boards of directors; sufficient time to devote to Board matters; and ability to work effectively and collegially with other Board members. In the case of incumbent directors, the Nominating and Corporate Governance Committee will review such directors’ overall service during their term, including the number of meetings attended, level of participation, and quality of performance during their term. For those potential new director candidates who appear upon first consideration to meet the Board’s selection criteria, the Nominating and Corporate Governance Committee will conduct appropriate inquiries into their background and qualifications and, depending on the result of such inquiries, arrange for meetings with the potential candidates. Although the Company does not maintain a separate policy regarding the diversity of the Board, during the director selection process the Nominating and Corporate Governance Committee does consider issues of diversity, such as occupation, gender, race and origin, when evaluating directors for nomination.

The Nominating and Corporate Governance Committee may use multiple sources for identifying director candidates, including its own contacts and referrals from other directors, members of management, the Company’s advisors, and executive search firms. The Nominating and Corporate Governance Committee will consider director candidates recommended by stockholders and will evaluate such director candidates in the same manner in which it evaluates candidates recommended by other sources. In making recommendations for director nominees for the Annual Meeting of Stockholders, the Nominating and Corporate Governance Committee will consider any written recommendations of director candidates by stockholders received by the Corporate Secretary of the Company. Recommendations must include the candidate’s name and contact information and a statement of the candidate’s background and qualifications and must be mailed to Nominating and Corporate Governance Committee, Agrify Corporation, 2468 Industrial Row Drive, Troy, Michigan 48084, Attn: Corporate Secretary.

The nomination procedures are intended to provide a flexible set of guidelines for the effective functioning of our director nominations process. The Nominating and Corporate Governance Committee reviews periodically the nomination procedures and anticipates that modifications may be necessary from time to time as our needs and circumstances evolve, and as applicable legal or listing standards change. The Nominating and Corporate Governance Committee may amend, with the approval of our Board of Directors, the nomination procedures included in the Nominating and Corporate Governance Committee charter and our other governance documents at any time, in which case the most current version will be available on our website at https://ir.agrify.com.

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Board Diversity Matrix (As of December 4, 2023)

Total Number of Directors

             

6

                 

Part I. Gender Identity

 

Female

 

Male

 

Non-Binary

 

Did Not Disclose Gender

Directors

 

 

6

 

 

Part II. Demographic Background

               

African American or Black

 

 

 

 

Alaskan Native or Native American

 

 

 

 

Asian

 

 

3

 

 

Hispanic or Latinx

 

 

 

 

Native Hawaiian or Pacific Islander

 

 

 

 

White

 

 

3

 

 

Two or More Races or Ethnicities

 

 

 

 

LGBTQ+

 

 

 

 

Did Not Disclose Demographic Background

 

 

 

 

The board diversity matrix for 2022 can be found in our definitive proxy statement filed with the Securities and Exchange Commission on April 29, 2022.

Director Qualifications

The Nominating and Corporate Governance Committee reviews annually with the Board the composition of the Board as a whole and recommends, if necessary, measures to be taken so that the Board reflects the appropriate balance of knowledge, experience, skills, expertise and diversity required for the Board as a whole and contains at least the minimum number of independent directors required by applicable laws and regulations. The Nominating and Corporate Governance Committee is responsible for ensuring that the composition of the Board accurately reflects the needs of the Company’s business and, in furtherance of this goal, proposing the addition of members and the necessary resignation of members for purposes of achieving this goal. The Committee also considers the nominees’ roles in assisting with development and implementation of the Company’s strategic plan.

The Board of Directors believes that each director nominee brings a strong and unique background and set of skills to the Board, giving the Board as a whole competence and experience in a wide variety of areas, including corporate governance and board service, executive management, private equity, finance, marketing and international business. Set forth below are the particular experiences, qualifications, attributes or skills, which led the Company’s Board of Directors to conclude that each director nominee should serve as a director of the Company.

Mr. Chang, a director since June 2019, is currently the chairman and chief executive officer of the Company. Mr. Chang has a wealth of successful experience directing, managing and/or financing early-stage agricultural- and technology-based companies. Mr. Chang’s entrepreneurial nature and well-developed leadership and financial experience led the Nominating and Corporate Governance Committee to conclude that his skills fit with the needs of the Board of Directors and qualified him to continue to serve as a director of the Company.

Mr. Holtzman, a director since July 2022, is Operations Director at Ocean 14 Capital, a private equity impact fund. Mr. Holtzman’s extensive experience in finance, government relations and international trade led the Nominating and Corporate Governance Committee to conclude that his skills and background fit the needs of the Board of Directors and qualified him to continue to serve as a director of the Company.

Ms. Chan, who is a director nominee, provides the Company with extensive experience in business development and retail sales. Ms. Chan’s experience as an entrepreneur led the Nominating and Corporate Governance Committee to conclude that her skills and background fit the needs of the Board of Directors and qualified her to be a director nominee.

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Mr. Mahoney, a director since December 2020, through his strategic advisory firm, has worked as an independent consultant assisting management teams and boards of directors through the identification of systemic risk and the development of creative strategies targeted towards maximizing shareholder value. He also qualifies as an “audit committee financial expert” as defined under SEC rules. Mr. Mahoney’s knowledge and experience with the legislative process of Congress and his diverse experience and knowledge in corporate governance led the Nominating and Corporate Governance Committee to conclude that his skills and background fit the needs of the Board of Directors and qualified him to continue to serve as a director of the Company.

Mr. Sokolow, a director since December 2021, is currently the co-Chief Executive Officer of SKYX Platforms, a Nasdaq-listed company. Mr. Sokolow has vast financing and public company executive management and board of director experience. He also qualifies as an “audit committee financial expert” as defined under SEC rules. Mr. Sokolow’s financial experience, combined with his operational and board of director experience led the Nominating and Corporate Governance Committee to conclude that his skills and background fit the needs of the Board of Directors and qualified him to continue to serve as a director of the Company.

Mr. Varier, a director since June 2020, is a managing partner of Arcadian Capital Management, a leader in cannabis venture capital. Mr. Varier has nearly 20 years of experience in corporate finance and investment advisory. He also qualifies as an “audit committee financial expert” as defined under SEC rules. Mr. Varier’s extensive capital markets experience, knowledge of the cannabis industry, as well as his experience working with cannabis companies as an investor, mentor, advisor and consultant, led the Nominating and Corporate Governance Committee to conclude that his overall experience fits the needs of the Board of Directors and qualified him to continue to serve as a director of the Company.

Leadership Structure

Combining Chairman and Chief Executive Officer Roles.    Our Board of Directors is committed to the principle of independence from management and to the highest standards of corporate governance. All of our directors other than Messrs. Chang and Hua are independent under Nasdaq listing rules. Our Nominating and Corporate Governance, Audit and Compensation Committees are currently composed entirely of independent directors. Our Board of Directors has adopted a flexible policy regarding the issue of whether the positions of Chairman and Chief Executive Officer should be separate or combined. This policy allows the Board to evaluate regularly whether the Company is best served at any particular time by having our Chief Executive Officer or another director hold the position of Chairman.

Currently, the Board believes there are several important advantages to combining the positions of Chairman and Chief Executive Officer. The Chief Executive Officer is the director most familiar with our business and industry and is most capable of effectively identifying strategic priorities and leading the discussion and execution of strategy. The Company’s independent directors bring experience, oversight, and expertise from outside the Company and industry, while the Chief Executive Officer brings Company-specific experience and expertise. Combining the Chief Executive Officer and Chairman positions creates a firm link between management and the Board, promotes the development and implementation of corporate strategy and facilitates information flow between management and the Board, which are essential to effective governance. The Board currently believes that combining the roles of Chairman and Chief Executive Officer contributes to a more efficient and effective Board, does not undermine the independence of the Board, and has no bearing on the ethical integrity of the directors.

Board of Directors’ Oversight of Risk

Our management bears responsibility for the management and assessment of risk at the Company on a daily basis. Management is also responsible for communicating the most material risks to the Board and its committees, who provide oversight of the risk management practices implemented by management. Our full Board provides oversight for risk management, except for the oversight of risks that have been specifically delegated to a committee. Even when the oversight of a specific area of risk has been delegated to a committee, the full Board may maintain oversight over such risks through the receipt of reports from the committee. In addition, the full Board may assume oversight over a particular risk, even if the risk was initially overseen by a committee, when the Board deems it appropriate. The Board and committee reviews occur principally through the receipt of regular reports from Company management on these areas of risk and discussions with management regarding risk assessment and risk management.

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Committees.    The Audit Committee maintains initial oversight over risks related to the integrity of the Company’s financial statements, internal control over financial reporting and disclosure controls, the performance of the Company’s independent registered public accounting firm and the operation of the Company’s ethics program. The Company’s Compensation Committee maintains initial oversight of risks related to the Company’s compensation practices, including practices related to equity programs, other executive or Company-wide incentive programs and hiring and retention. The Nominating and Corporate Governance Committee assists the Board of Directors in fulfilling its oversight responsibilities with respect to independence of Board members and compliance with SEC rules and Nasdaq listing standards with respect to Board and committee composition.

Full Board.    At its regularly scheduled meetings, the Board generally receives several reports which include information relating to specific risks faced by the Company. As appropriate, the Company’s Chief Executive Officer or other members of senior management provide operational reports, which include risks relating to the Company’s business. At each regularly scheduled Board meeting, the full Board also receives reports from committee chairpersons, which may include a discussion of risks initially overseen by the committees for discussion and input from the full Board. As noted above, in addition to these regular reports, the Board receives reports on specific areas of risk from time-to-time, such as cyclical or other risks that are not covered in the regular reports given to the Board.

Compensation of Outside Directors

Annual Cash Compensation.    Each of the Company’s non-employee directors receives an annual cash retainer of $24,000, payable in twelve monthly installments. In addition, the following Committee retainer amounts are payable to Committee members.

The Audit Committee Chair receives an annual retainer of $5,000 per year, while Audit Committee members are entitled to receive an annual retainer of $1,000. The annual retainers are paid in twelve monthly installments and are in addition to the annual cash retainer for non-employee directors described above.

The Compensation Committee Chair receives an annual retainer of $5,000 per year, while Compensation Committee members are entitled to receive an annual retainer of $1,000. The annual retainers are paid in twelve monthly installments and are in addition to the annual cash retainer for non-employee directors described above.

The Nominating and Corporate Governance Committee Chair receives an annual retainer of $5,000 per year, while Nominating and Corporate Governance Committee members are entitled to receive an annual retainer of $1,000. The annual retainers are paid in twelve monthly installments and are in addition to the annual cash retainer for non-employee directors described above.

Currently, there are no annual retainer fees awarded to either the Merger and Acquisitions Committee Chair or the Merger and Acquisition Committee members.

Stock Options and Share-Based Awards.    Following initial election to the Company’s Board of Directors, non-employee directors are eligible to receive restricted stock units as determined by the Board.

The Company’s Board and Compensation Committee believe that equity-based awards are essential to our continued success. Equity-based awards are necessary to attract, retain and motivate highly qualified directors to serve Agrify and to improve Agrify’s business results and earnings by providing these individuals an opportunity to acquire or increase a direct proprietary interest in Agrify’s operations and future success while further aligning recipient’s interests with those of shareholders.

The Board compensation guidelines described above are designed to (a) compensate Committee members through Committee cash retainers in order to provide compensation commensurate with relevant service level commitments for Committee service and (b) set overall Board compensation at a level that is competitive with market norms, in order to enable the Company to attract potential new directors and provide market-based remuneration for existing directors.

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Non-Equity Incentive Plan Compensation.    We do not provide Non-Equity Incentive Compensation to our directors.

Pension Benefits.    We do not have a pension plan and therefore, do not offer any such pension arrangements to our directors.

Outside Directors Compensation Table for 2022

The table below provides compensation information for the year ended December 31, 2022 for each non-employee member of our Board of Directors. Stuart Wilcox served on the Board until July 14, 2022, when he resigned in connection with his appointment as Chief Operating Officer, and Thomas Massie served on the Board until July 8, 2022, when he resigned from the Board and from his position as President and Chief Operating Officer. Max Holtzman was appointed to the Board on July 14, 2022.

Director

 

Fees
Earned or
Paid In
Cash
(1)

 

Stock
Awards
(2)(3)

 

Option
Awards
(4)

 

Non-Equity
Incentive Plan
Compensation

 

Change In
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings

 

All Other
Compensation

 

Total

Guichao Hua

 

$

25,500

 

$

366

 

$

 

$

 

$

 

$

 

$

25,866

Max Holtzman

 

 

18,000

 

 

422

 

 

 

 

 

 

 

 

 

 

18,422

Timothy Mahoney

 

 

42,393

 

 

422

 

 

 

 

 

 

 

 

 

 

42,815

Leonard J. Sokolow

 

 

34,583

 

 

422

 

 

 

 

 

 

 

 

 

 

35,005

Krishnan Varier

 

 

37,667

 

 

422

 

 

 

 

 

 

 

 

 

 

38,089

Stuart Wilcox(5)

 

 

13,500

 

 

1,580

 

 

 

 

 

 

 

 

 

 

15,080

____________

(1)      Represents the aggregate dollar amount of all fees earned or paid in cash for services as a director, including monthly retainer fees and committee membership, as described above.

(2)      The reported amounts are calculated in accordance with the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standard Codification Topic 718, “Compensation — Stock Compensation (“ASC Topic 718”).

(3)      As of December 31, 2022, the aggregate number of unvested restricted stock units outstanding for each current non-employee director were as follows: 267 for each of Messrs. Hua, Mahoney, Varier, Sokolow and Holtzman.

(4)      As of December 31, 2022, the aggregate number of unexercised stock option awards outstanding for each current non-employee director were as follows: 435 for Mr. Hua, 435 for Mr. Mahoney, 432 for Mr. Varier; 160 for Mr. Sokolow and none for Mr. Holtzman.

(5)      Starting in 2021, the Company entered into a strategic advisory consulting agreement with Mr. Wilcox leveraging his cannabis-related expertise in cultivation, extraction, supply chain optimization and industry networking. Per the terms of the agreement, the Company paid a $10,000 monthly consulting fee to Mr. Wilcox, which fee was in addition to his board-related monthly retainer and committee membership fees described above. The consulting agreement was terminated on July 14, 2022.

Stockholder Communications with the Board

The Board of Directors welcomes communications from stockholders. Parties interested in the Company and the operation of the Board or its committees, in addition to contacting management, may contact the Chairman of the Board or the Independent directors as a group by directing requests for such contact through the Company’s Corporate Secretary at “Board of Directors/Non-Employee Directors, Agrify Corporation, 2468 Industrial Row Drive, Troy, Michigan 48084, Attn: Corporate Secretary”. Communications by e-mail should be addressed to board@agrify.com and marked “Attention: Corporate Secretary” in the “Subject” field. Requests for contact, except for those stockholder communications that are outside the scope of Board matters or duplicative of other communications by the applicable stockholder and previously forwarded to the intended recipient, shall be directed by the Company’s Corporate Secretary to (a) the intended recipient or (b) the Chairman of the Board, who shall,

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subject to advice and assistance from the Company’s legal advisors, (i) be primarily responsible for monitoring communications from shareholders and other interested parties and (ii) provide copies or summaries of such communications to the other directors as he or she considers appropriate.

Annual Meeting Attendance

Directors are required, absent compelling circumstances, to attend our Annual Meeting of Stockholders.

Code of Ethics and Business Conduct

The Company has adopted a code of ethics and business conduct that applies to our directors, officers and employees. This code of ethics and business conduct (which we refer to as a “code of conduct”) may be accessed and reviewed through the Company’s website at https://ir.agrify.com. Any amendments to, or waivers from, any provisions of the code of conduct which apply to our principal executive officer, principal financial officer, principal accounting officer or controller, or any person performing similar functions, will be disclosed either on a Current Report on Form 8-K or on our website promptly following the date of any such amendment or waiver.

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STOCK OWNERSHIP

Beneficial Ownership of Certain Stockholders, Directors and Executive Officers

The following table provides information, as of December 4, 2023, about the beneficial ownership of our Company’s Common Stock by: (1) the persons known to us to be beneficial owners of more than 5% of our Company’s outstanding Common Stock; (2) our directors; (3) each Named Executive Officer (as defined under “Compensation of Named Executive Officers”); and (4) our directors and executive officers as a group. To the best of our knowledge, each such person has sole voting and investment power over the shares shown in this table, except as otherwise indicated. As of December 4, 2023, there were 58 record holders and 1,701,243 outstanding shares of our Company’s Common Stock.

The number of shares beneficially owned by each stockholder is determined under rules issued by the SEC and includes voting or investment power with respect to securities. Under these rules, beneficial ownership includes any shares as to which the individual or entity has sole or shared voting power or investment power and includes any shares as to which the individual or entity has the right to acquire beneficial ownership within 60 days after December 4, 2023 through the exercise of any warrant, stock option or other right. The inclusion in this proxy statement of such shares, however, does not constitute an admission that the named stockholder is a direct or indirect beneficial owner of such shares. Common stock subject to options or warrants currently exercisable, or exercisable within 60 days after December 1, 2023, are deemed outstanding for the purpose of computing the percentage ownership of the person holding those options or warrants but are not deemed outstanding for computing the percentage ownership of any other person.

Unless otherwise indicated below, to our knowledge, all persons named in the table have sole voting and investment power with respect to their shares of Common Stock, except to the extent spouses share authority under community property laws.

 

Beneficial Ownership

   

Number of
Shares

 

Percent of
Total
(1)

Principal Stockholders

       

 

Alyeska Investment Group, L.P.(2)

 

161,701

 

8.98

%

77 West Wacker Drive, 7th Floor Chicago, IL 60601

       

 

Directors and Executive Officers(3)(5)

       

 

Raymond Chang(4)

 

356,958

 

9.99

%

David Kessler

 

1,032

 

*

 

Guichao Hua

 

30,702

 

1.78

%

Max Holtzman

 

52,724

 

3.01

%

Timothy Mahoney

 

45,064

 

2.58

%

Krishnan Varier

 

41,986

 

2.41

%

Leonard J. Sokolow

 

36,724

 

2.11

%

Timothy Oakes

 

208

 

*

 

Thomas Massie

 

2,057

 

*

 

All Directors and Executive Officers as a Group (10 persons)

 

567,455

 

22.07

%

____________

*        Less than 1%.

(1)      The percentages shown with respect to any identified individual or group are calculated by dividing: (i) the sum of (a) the number of shares of Common Stock actually owned as of December 1, 2023 plus (b) the number of shares of Common Stock that may be acquired through the exercise of stock options, warrants or any other rights or the vesting of Restricted Stock Units within 60 days thereof (“Currently Exercisable Awards”) by (ii) the sum of 1,701,243 shares of Common Stock outstanding as of December 1, 2023, plus the amount referenced in clause (i)(b) for such individual or group.

(2)      Includes 61,701 shares of Common Stock and warrants to purchase 100,000 shares of Common Stock. For purposes of the reporting requirements of the Exchange Act, Alyeska Fund GP, LLC and Anand Parekh are deemed to be beneficial owners of such securities. Information set forth above and in this note (2) is based upon the Schedule 13G filed by Alyeska Investment Group, L.P., Alyeska Fund GP, LLC and Anand Parekh on February 14, 2023.

(3)      The address of each of the directors and executive officers listed above is c/o Agrify Corporation, 2468 Industrial Row Dr., Troy, MI 48084.

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(4)      Includes (i) options to purchase 6,244 shares of Common Stock that are exercisable within 60 days of December 1, 2023, (ii) 575 shares of Common Stock owned by Mr. Chang, (iii) 118,077 shares of common stock held by RTC3 2020 Irrevocable Family Trust, of which Mr. Chang retains the authority to remove the independent trustee, (iv) 648 shares of common stock held by NXT3J Capital, LLC, an entity controlled by Mr. Chang, (v) warrants to purchase 317 shares of common stock associated with our 2020 convertible promissory notes held by RTC3 2020 Irrevocable Family Trust, (vi) options to purchase 186 shares of common stock held by Mr. Chang’s son that are exercisable within 60 days of December 1, 2023, and (vii) warrants to purchase 230,906 shares of Common Stock that are held by RTC3 2020 Irrevocable Family Trust, but only to the extent exercisable due to a 9.99% beneficial ownership limitation.

(5)      Includes the following shares subject to options that are exercisable within 60 days of December 1, 2023: Mr. Kessler, 782; Mr. Hua, 449; Mr. Holtzman, 0; Mr. Mahoney, 449; Mr. Varier, 447; Mr. Sokolow, 174; Mr. Oakes, 0; and Mr. Massie, 954. Includes the following shares subject to Restricted Stock Units that vest within 60 days of December 1, 2023, subject to shareholder approval of Item 6: Mr. Hua, 26,686; Mr. Holtzman, 52,635; Mr. Mahoney, 44,526; Mr. Varier, 41, 450; and Mr. Sokolow, 36,461.

Delinquent Section 16(a) Reports

Under the U.S. securities laws, directors, executive officers and persons holding more than 10% of the Company’s Common Stock must report their initial ownership of the Common Stock and any changes in that ownership to the SEC. The SEC has designated specific due dates for these reports and we must identify in this proxy statement those persons who did not file these reports when due. Based solely on our review of the copies of these forms received by us or written representations furnished to us, we believe that, for the reporting period covering our 2022 fiscal year, our executive officers and directors complied with all their reporting requirements under Section 16(a) for this fiscal year, except for (i) Form 4s filed by Messrs. Chang and Wilcox on February 2, 2022 relating to transactions that occurred on January 28, 2022 due to an administrative oversight, (ii) a Form 4 filed by Mr. Holtzman on July 21, 2022 relating to a grant that occurred on July 14, 2022 due to a delay in obtaining EDGAR codes, (iii) Form 3s filed by Steve Drucker and Chris Benyo on July 28, 2022 relating to a reportable event on July 14, 2022 due to a delay in obtaining EDGAR codes, (iv) a Form 3 filed by David Kessler on August 5, 2022 relating to a reportable event on July 14, 2022 due to a delay in obtaining EDGAR codes, (v) a Form 3 filed by Timothy Hayden on November 14, 2022 relating to a reportable event on November 1, 2022 due to an administrative oversight, and (vi) a Form 4 filed by Timothy Oakes on December 19, 2022 relating to a grant that occurred on November 10, 2022 due to an administrative oversight.

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EQUITY COMPENSATION PLANS

Equity Compensation Plan Information

During April 2022, our Board of Directors, and on June 8, 2022, our stockholders, adopted and approved the 2022 Omnibus Plan. The 2022 Omnibus Plan provides for the grant of stock options, SARs, restricted stock, restricted stock units, performance share awards, and other stock-based and cash-based awards to our non-employee directors, officers, employees and non-employee consultants. The aggregate number of shares of Common Stock that may be reserved and available for grant and issuance under the 2022 Omnibus Plan is 9,354 shares. Shares will be deemed to have been issued under the 2022 Omnibus Plan solely to the extent actually issued and delivered pursuant to an award. If any award expires, is cancelled, or terminates unexercised or is forfeited, the number of shares subject thereto is again available for grant under the 2022 Omnibus Plan. The 2022 Omnibus Plan will continue in effect, unless sooner terminated, until the tenth (10) anniversary of the date on which it is adopted by the Board of Directors.

On December 18, 2020, the Company’s Board of Directors, and on January 11, 2021, the Company’s stockholders, adopted and approved the 2020 Omnibus Plan. The 2020 Omnibus Plan provides for the grant of stock options, SARs, performance share awards, performance unit awards, distribution equivalent right awards, restricted stock awards, restricted stock unit awards and unrestricted stock awards to non-employee directors, officers, employees and non-employee consultants of the Company or its affiliates. The aggregate number of shares of Common Stock that may be reserved and available for grant and issuance under the 2020 Omnibus Plan is 0 shares. Shares will be deemed to have been issued under the 2020 Omnibus Plan solely to the extent actually issued and delivered pursuant to an award. If any award expires, is cancelled, or terminates unexercised or is forfeited, the number of shares subject thereto is again available for grant under the 2020 Omnibus Plan.

For additional information regarding the above plans, see Note 13 to our audited consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

Equity Compensation Plan Table

The following table sets forth certain information as of December 31, 2022, for our 2022 Omnibus Equity Incentive Plan and 2020 Omnibus Equity Incentive Plan:

Plan Category

 

(A)
Number of
Shares to
be Issued
upon Exercise
of Outstanding
Stock Options

 

(B)
Weighted-Average
Exercise Price
of Outstanding
Stock Options

 

(C)
Number of
Shares Remaining
Available
for Issuance
under Equity
Compensation
Plans (Excluding
Shares Reflected
in Column (A))

2022 Omnibus Plan

 

 

$

 

9,354

2020 Omnibus Plan

 

 

 

2,768

 

TOTAL

 

 

 

2,768

 

9,354

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EXECUTIVE OFFICERS

Executive Officers of the Company

Following are the names and ages of the Agrify’s current executive officers, the year they became a named executive officer, and their principal occupations or employment for at least the past five years.

Name

 

Age

 

Experience

Raymond Chang

 

53

 

Refer to “ITEM 1 — Election of Directors — Nominees for Election” on page 5 of this Proxy.

David Kessler

 

45

 

Mr. Kessler has served as our Chief Science Officer since July 2022. Since 2013, he has served as owner and operator of Willowbrook Orchids LLC, a national award-winning boutique orchid nursery. From 2006 through 2016, Mr. Kessler served as a Horticulturist at Atlantic Hydroponics, where he oversaw project management. Mr. Kessler has over twenty years of cannabis cultivation experience including ten years of CEA (closed environmental agriculture) indoor farm design. Mr. Kessler’s focus on the application of technology to optimize process & workflow while reducing operational costs are a common theme throughout his prolific industry publications having written for such companies as Sunlight Supply, Maximum Yield Magazine, Botanicare, and Hawthorne Gardening Company. Mr. Kessler also regularly lectures at many cannabis industry events and appears regularly on industry podcasts. Mr. Kessler’s decades of experience with horticultural lighting have allowed him the opportunity to be a product tester for companies such as Sharp Electronics and the Horticultural Lighting Group. He has worked with independent 3rd party laboratories to provide unbiased testing data comparing product performance from a multitude of horticultural lighting manufacturers. Mr. Kessler received a Bachelor of Arts degree and undertook post graduate studies in biology at SUNY-Oswego.

Brian Towns

 

37

 

Mr. Towns has served as the Executive Vice President and General Manager of the Extraction Division since May 2023, and previously served as Vice President of Operations from October 2021 through May 2023. Prior to that role, Mr. Towns served as Operations Manager of Precision Extraction from October 2016 through January 2019, at which time, Mr. Towns was appointed as the Director of Operations role at Precision Extraction in January 2019 until the acquisition by Agrify in October 2021. In these roles, with increasing responsibility, he oversaw multiple critical functions, including supply chain management, manufacturing, compliance, engineering, customer support, and field service teams. Mr. Town’s visionary approach and commitment to maintaining the highest standards ensured that Precision Extraction delivered top-notch products and services to its customers. The acquisition of Precision Extraction by Agrify in October of 2021 and the addition of industry leading equipment providers Pure Pressure, Lab Society, and Cascade Sciences put Mr. Towns in the position to lead the extraction businesses. At Agrify, Mr. Town’s expertise and innovative mindset continue to drive the extraction division’s success. With 7 years of experience in the cannabis extraction industry, Mr. Towns helps spearhead the development and implementation of cutting-edge extraction technologies, ensuring Agrify remains at the forefront of the market. Before joining Agrify, Mr. Towns honed his skills in executive protection, ensuring the safety and security of high-profile individuals from January 2012 through September 2014 as an account executive. Mr. Town’s early career led him to regional management in the wireless retail business from August 2014 to October 2016, where he demonstrated exceptional leadership and strategic acumen. Mr. Towns received his formal education in Michigan.

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Table of Contents

COMPENSATION OF NAMED EXECUTIVE OFFICERS

This section describes the compensation paid, or payable, for the last two fiscal years to our named executive officers. Our named executive officers during the fiscal year ended December 31, 2022 were Raymond Chang, our Chairman and Chief Executive Officer, David Kessler, our Chief Science Officer, Thomas Massie, our former President and Chief Operating Officer, and Timothy Oakes, our former Chief Financial Officer. Mr. Massie resigned as President and Chief Operating Officer on July 8, 2022. Mr. Oakes resigned as Chief Financial Officer effective as of February 28, 2023.

Summary Compensation Table

The table below summarizes the total compensation paid or earned by each of the named executive officers noted below for services rendered in all capacities, during the fiscal years ended December 31, 2022 and 2021. As a smaller reporting company, we are only required to provide two years of compensation information for our named executive officers.

Name and Principal Position

 

Year

 

Salary

 

Stock Awards(1)

 

Option Awards(1)

 

Non-Equity Incentive Plan Compensation(2)

 

Non-qualified Deferred Compensation Earnings

 

All Other Compensation(3)

 

Total

Raymond Chang

 

2022

 

$

350,479

 

$

471,000

 

$

 

$

175,000

 

$

 

$

33,099

 

$

1,029,578

Chairman and Chief Executive Officer

 

2021

 

 

290,000

 

 

 

 

4,559,100

 

 

325,000

 

 

 

 

31,951

 

 

5,206,051

David Kessler

 

2022

 

 

220,233

 

 

177,550

 

 

 

 

50,000

 

 

 

 

32,164

 

 

479,947

Chief Science Officer

 

2021

 

 

210,750

 

 

 

 

350,700

 

 

80,000

 

 

 

 

29,919

 

 

671,369

Thomas Massie(4)

 

2022

 

 

655,605

 

 

384,000

 

 

 

 

117,033

 

 

 

 

33,033

 

 

1,189,671

Former President and Chief Operating Officer

 

2021

 

 

70,686

 

 

 

 

828,137

 

 

42,033

 

 

 

 

2,663

 

 

943,519

Timothy Oakes(5)

 

2022

 

 

264,454

 

 

247,625

 

 

 

 

78,022

 

 

 

 

19,626

 

 

609,727

Former Chief Financial Officer

 

2021

 

 

63,667

 

 

 

 

350,700

 

 

28,022

 

 

 

 

 

 

442,389

____________

(1)      Amounts are based on the aggregate grant date fair value of stock awards and stock option awards made to the Named Executive Officers in the applicable year. The reported amounts are calculated in accordance with the provisions of ASC Topic 718. See Note 13 of the notes to consolidated financial statements included in our Annual Report on Form 10-K filed on November 28, 2023, regarding assumptions underlying the valuation of the Company’s equity awards in 2022 and 2021.

(2)      Represent amounts earned by each Named Executive Officer under the Company’s performance-based annual incentive plan.

(3)      Amounts represent payment of health plan premiums as per Company policy.

(4)      Mr. Massie resigned as President and Chief Operating Officer on July 8, 2022. Mr. Massie’s reported salary amount for the year ended December 31, 2022 includes $500,000 in severance payments.

(5)      Mr. Oakes resigned as Chief Financial Officer effective February 28, 2023.

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Table of Contents

Outstanding Equity Awards at Fiscal Year End

The following table sets forth outstanding equity awards for Named Executive Officers as of December 31, 2022.

 

Option Awards

 

Stock Awards

Name

 

Grant
Date

 

Vesting
Period

 

Number of
Securities
Underlying
Unexercised
Options

 

Option
Exercise
Price

 

Option
Expiration
Date

 

Number of
Shares of
Stock That Have
Not Vested

 

Market
Value of
Shares
of Stock
That Have
Not Vested

Exercisable

 

Unexercisable

 

Raymond Chang

 

5/6/20

 

(1)

 

1,689

 

 

$

456.00

 

5/6/30

 

 

$

   

7/20/20

 

(2)

 

71

 

 

 

456.00

 

7/20/30

 

 

 

   

10/19/20

 

(2)

 

1,324

 

 

 

972.00

 

10/19/30

 

 

 

   

2/17/21

 

(3)

 

1,986

 

1,264

 

 

2,768.00

 

2/17/31

 

 

 

   

8/8/22

 

(5)

 

 

 

 

 

 

1,500

 

 

9,990

David Kessler

 

5/6/20

 

(1)

 

168

 

 

 

456.00

 

5/6/30

 

 

 

   

7/20/20

 

(2)

 

159

 

 

 

456.00

 

7/20/30

 

 

 

   

10/19/20

 

(2)

 

241

 

 

 

972.00

 

10/19/30

 

 

 

   

2/17/21

 

(3)

 

134

 

86

 

 

2,768.00

 

2/17/31

 

 

 

   

8/8/22

 

(5)

 

 

 

 

 

 

500

 

 

3,330

   

9/30/22

 

(5)

 

 

 

 

 

 

250

 

 

1,665

Timothy Oakes

 

10/19/20

 

(2)

 

206

 

 

 

972.00

 

10/19/30

 

 

 

   

2/17/21

 

(3)

 

153

 

97

 

 

2,768.00

 

2/17/31

 

 

 

   

8/8/22

 

(5)

 

 

 

 

 

 

625

 

 

4,163

   

8/8/22

 

(6)

 

 

 

 

 

 

417

 

 

2,777

Thomas Massie

 

5/6/20

 

(7)

 

92

 

 

 

456.00

 

5/6/30

 

 

 

   

8/10/20

 

(7)

 

66

 

 

 

456.00

 

7/20/30

 

 

 

   

10/19/20

 

(7)

 

185

 

 

 

972.00

 

10/19/30

 

 

 

   

12/21/20

 

(7)

 

111

 

 

 

972.00

 

12/21/30

 

 

 

   

2/17/21

 

(7)

 

250

 

 

 

2,768.00

 

2/17/31